JERUSALEM, Aug. 7 (Xinhua) -- The Tel Aviv Stock Exchange (TASE) registered a sharp 6.5 percent fall on Sunday morning in the wake of Standard & Poor's (S&P) downgrading of United States credit on Friday from AAA to AA+.
The step was the first such downgrade in American history.
"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," S&P said in a statement.
Trading in the TASE was stopped during the morning due to the instability in indices.
"When the trading gets high or low we use what we call an ' English Opening,'" TASE spokeswoman Idit Yaaron told Xinhua, "and this happens if the trading gets higher or lower than 2.5 percent, the trading stops for two or three minutes and it's checked again. If the trading is still higher or lower than 2.5, then it stops again."
If, after this measure, trading goes up or down by five percent, Yaaron said, "the TASE stops the trading for 45 minutes for the investors to sit down and check their orders for errors," and consider further action.
The "last time we had an English Opening was 2008, when the Lehman Brothers collapsed," Yaaron said.
S&P, whose move prompted major losses on international markets, based their decision on concerns over the rising debt and budget deficits in the U.S.
Israel's Finance Ministry and the Bank of Israel issued a joint statement on Saturday saying that they were closely monitoring the situation, along with the Securities Authority.
While, "the implications of events in the global markets are not clear at this stage," the agencies said they stood "ready to use the tools available to them as necessary," the statement read.
Senior bank and ministry officials held an emergency meeting on Saturday night to assess the situation, although the document reassured the public that Israel's macroeconomic situation "is good," and that, "so far the debt crises abroad have had a limited impact on Israel, due to its macroeconomic strength."
The U.S. accounts for close to a quarter of Israel's exports, and more than 10 percent of it's imports, according to official statistics.